steps on the cards Deepening of the bond market and setting up of a fund to promote debt and equity investment in the infrastructure sector To develop the corporate bond market and encourage the EPFO to invest in infrastructure projects To launch an Infrastructure Trust Fund on the lines of a Real Estate Investment Trust

New Delhi, September 23
In a bid to stimulate investments in the infrastructure space, the government will launch infrastructure investment trusts by November-end this year.

This was stated today by Arvind Mayaram, Secretary, Department of Economic Affairs, Ministry of Finance, while speaking at Ficci’s 5th India Infrastructure Summit 2013.

Like the Real Estate Investment Trusts (REITs), the Infrastructure Investment Trusts (IITs) will manage the projects over a longer period of time to do away with the current practice of private players turning into developers whose interest is limited to merely contracting for construction and are not attuned to a 25-year relationship with the Government.

"A major reason why some PPP projects in the infrastructure sector have run into problems is that many private partners did not price the risk in projects over a 25-year time frame," Mayaram said, adding even officers in the public sector do not have the capacity to carve out a long-term relationship with the private sector.

The government is working on various steps, including deepening of the bond market and setting up of a fund to promote debt and equity investment in the infrastructure sector.

Mayaram said in the next two-three months there will be a greater deepening of the equity and bond markets for financing of the infrastructure sector.

On the debt side, the Government is making efforts to develop the corporate bond market and encourage the Employees Provident Fund Organisation (EPFO) to invest in infrastructure projects, he said.

Regretting that EPFO is not willing to take risks and participate in equity “as the employees do not have an appetite for risk”, he said “we need to build confidence in them that it is a safe investment”.

On the equity side, Mayaram said in two months the Government would come up with an Infrastructure Trust Fund, which would be in the nature of a Real Estate Investment Trust (REIT).

Mayaram said it was important to engage overseas pension funds and sovereign wealth funds and that once they come Indian investors would also follow suit.

He said the Government was working with the Reserve Bank to ensure that extension of the term of the infrastructure sector loan, once it is shifted to the Infrastructure Debt Fund (IDF), is not treated as restructuring of loan.

The investment need in the sector is estimated at $1 trillion in the five-year period ending March 2017 and 50 per cent of it is expected to come from the private sector.

Mumbai, September 23
Stocks extended losses for the second session, with the benchmark S&P BSE Sensex today plunging 363 points to end below the 20,000 mark, on concern RBI Governor Raghuram Rajan would increase rates further to curb inflation.

The banking and realty sectors, which are sensitive to interest rates, were the biggest losers. Mortgage lender HDFC, ICICI Bank and HDFC Bank dragged the Sensex lower by about 155 points.

The 30-share Sensex opened more than 200 points lower, extending a 383-point fall on Friday, when the RBI unexpectedly raised the repo rate to 7.5 per cent from 7.25 per cent, saying inflation had to be lowered to more tolerable levels.

The CNX Nifty index on the NSE closed at 5,889.75, losing 122.35 points or 2.04 per cent. The SX40 index on the MCX Stock Exchange fell 206.17 points to 11,820.24.

British lender Standard Chartered said it expects the RBI to increase the repo rate to 8 per cent by the end of 2013 as it focuses more on inflation than growth, while Japanese brokerage Nomura said it expects a 0.50 per cent hike in the rate this fiscal.

Credit Suisse said there may be one or two more repo rate increases from the RBI in the next few months, without quantifying the expected increases.

New Delhi, September 23
India is among the countries that are most vulnerable to capital outflows as it relies heavily on external funding, global credit rating agency Moody's cautioned today.

“India and Indonesia are the most vulnerable to capital outflows because of high reliance on external funding,” Moody’s Analytics said in its report - 'How US Monetary Tightening Affects Asian Markets'.

It said the impact of recent Fed announcements on bond yields have exposed structural flaws in Asian economies, particularly in India and Indonesia.

Moody's said the US Fed's talk earlier of a likely tapering of monetary stimulus depreciated the rupee by 15 per cent, making it the worst performing currency in Asia.

The US Federal Reserve last week surprised the markets by saying it will continue with its monthly $85 billion bond-buying programme and wait for more evidence of growth recovery before thinking of unwinding the stimulus.

Expectations that the stimulus programme would be tapered had led to fears of capital outflows, causing the rupee to depreciate against the dollar and stocks to fall.

The rupee touched a low of 68.86 to the US dollar on August 28. It is currently trading around 62.83 to a dollar. — PTI

New York, September 23
Finnish firm Nokia, which is selling its devices and services business to Microsoft, will pay the software giant 37.9 million euros (about $51.2 million) if the handset maker's shareholders oppose the deal.

In addition, Nokia will pay Microsoft another 75.8 million euros if its shareholders reject the transaction and the company sells at least 20 per cent of the devices and services (D&S) business to another buyer within a year of terminating the deal, according to a regulatory filing.

On September 3, Microsoft said it will acquire Nokia's handset business for 5.44 billion euros. Nokia's extraordinary general meeting for consideration of the sale is scheduled for November 19.

In a filing to the regulator, Nokia said: "If the sale of the D&S business is not confirmed and approved by our shareholders...we will not sell the D&S business to Microsoft International at this time and we will continue to conduct our business in the ordinary course and evaluate all available go-forward strategic alternatives.

"In addition, both Nokia and Microsoft International will have the right to terminate the purchase agreement and we would be obligated to pay Microsoft International or its designee a damages fee equal to 37,900,000 euro." — PTI

Mumbai, September 23
The RBI today announced a 13-member committee, including former Citibank CEO Vikram Pandit and Axis Bank chief Shikha Sharma, to frame a "clear and detailed" vision for financial inclusion/deepening across the country.

The 'Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households' has been tasked to develop a comprehensive monitoring framework to track the progress of the financial inclusion and deepening efforts on a nationwide basis, the central bank said.

The panel is headed by Nachiket Mor, Member on RBI's Board of Directors.

It will review existing strategies and develop new ones that address specific barriers to progress and encourage participants to work swiftly towards achieving full inclusion and financial deepening, consistent with the design principles, the RBI said. — PTI

corporate governance The market regulator would soon make necessary changes in its framework for the Listing Agreement and other regulations The proposed measures include greater powers to minority shareholders, an orderly succession planning and hefty penalties for non-compliance to model corporate governance practices The companies would have to explain to their shareholders the relationship between their top management salaries and the performance of the company

New Delhi, September 23
In a major overhaul of corporate governance norms, SEBI will soon put in place stringent checks against unjustifiable CEO salaries at listed companies and ask them to adopt a whistleblower policy to protect the employees exposing any wrongdoings by the top management.

The capital market regulator would soon make necessary changes in its framework for the Listing Agreement and other regulations that every company needs to follow with regard to their corporate governance practices after becoming a publicly listed entity, a senior official said.

SEBI had sought comments from the general public and other stakeholders earlier this year for a major overhaul of corporate governance norms. Besides, the new Companies Act has also proposed various new measures in this regard.

The necessary changes are being finalised after taking into account the public suggestions, expert opinion and the Companies Act, 2013 provisions, the official added.

The other proposed measures include greater powers to minority shareholders, an orderly succession planning and hefty penalties for non-compliance to model corporate governance practices and related norms.

With regard to executive pay, SEBI will ask the companies to provide a ratio of top management remuneration and the median staff salary. Besides, the companies would have to explain to their shareholders the relationship between their top management salaries and the performance of the company, as also the rationale behind the salaries and pay hikes given to the top executives.

There have been many instances of CEOs and other top managers getting hefty salaries, despite inadequate financial and business gains for the companies.

The regulator also plans to usher in new concept of 'Corporate Governance Rating' by independent agencies to monitor the level of compliance by the listed companies and regular inspection by the SEBI and the stock exchanges.

There is also a proposal to put in place a mechanism for greater oversight by and on independent directors, while the minority shareholders would get greater powers in cases like merger and acquisitions, business dealings with entities linked to promoters and top management, changes in the article of association of a company, among other important matters.

With regard to CEO salaries, SEBI wants the companies to be more responsible towards the interest of shareholders, although it does not intend to put any pay caps. Therefore, the regulator is focussing on improving the disclosure levels, so that the investors can take more informed decisions. For strengthening a vigil mechanism against any wrongdoings by promoters and top executives, SEBI wants the companies to set up a board committee for framing whistleblower policies. — PTI

New Delhi, September 23
Global beverages and snacks major PepsiCo today said it has promoted India-born Sanjeev Chadha to the position of chief executive officer (CEO) of its Asia, Middle-East and Africa (AMEA) region operations, spanning across 90 countries.

A veteran having spent 23 years at PepsiCo, Chadha will directly report to company's chairman and CEO Indra K Nooyi, the company said.

He will be based at the PepsiCo's Dubai office and oversee all aspects of company's AMEA business with immediate effect, it added.

Prior to the elevation, Chadha has been the president of PepsiCo Middle-East and Africa.

Commenting on the development, Nooyi said: "Sanjeev is one of the most respected senior leaders in the PepsiCo family and he has a strong track record of success. His leadership, experience and deep knowledge of the business, the region and its people will help to continue to drive success in AMEA." A founding member of the PepsiCo business in India 20 years ago, Chadha moved to the position of PepsiCo's president of Middle-East and Africa in January 2011.

Prior to that he was the chairman and CEO of PepsiCo India. — PTI

New York, September 23
Smartphone maker BlackBerry has paused the global rollout of instant messaging service BlackBerry Messenger (BBM) on rival Android and iPhones, blaming the delay on issues caused by an unreleased version.

However, the Canada-based firm said customers who have downloaded BBM for iPhone will be able to use it.

"We know you're waiting. Pausing #BBM4All rollout to fix issues caused by unreleased BBM for Android app," BlackBerry said on Twitter. "We will provide you an update on timing as soon as we can. Teams are working non-stop," it added. — PTI